The proposed research examines the relationship between population change and structural innovation in political institutions. The economic theory of innovation in markets is generalized to explain changes in governmental structures. Exogenous shifts in population characteristics within a jurisdiction induce citizen groups to innovate in order to capture gains or obstruct losses anticipated under prior arrangements. A dynamic, structural equation model will be constructed to simultaneously evaluate the role of population trends (e.g., income concentration and social diversity across constituents), the "impact" of various procedural reforms (e.g., centralization of decision authority, elimination of electoral subdistricts), environmental constraints (e.g., jurisdictional mobility of constituents), and the redistributive effect of public service policies. The model will assess the content and direction of change in social choice rules with respect to constituent entitlements, and estimate the time lag between disequilibrating population shifts and arrangemental innovation. To test the model and, thereby, verify the theory, time series and cross sectional data will be collected on a sample of randomly selected municipalities in the United States. The model will be estimated using multivariate, statistical procedures including distributed lag and simultaneous equation formulations. Results of the empirical analysis will be used to refine the theory and, finally, to explore the way in which policy-makers--intentionally or unintentionally--may induce structural innovations in government.